This article series is focusing on subject matter conflict of interest issues that are a significant concern for attorneys. Patent practitioners have an additional layer of concern with respect to subject matter conflicts of interest. This type of additional conflict search is not related to the inventors, assignee or research team, but is directly related to the patent application disclosure.

The first article introduced the topic and discussed generally why it is an important consideration. The second article reviewed in depth a recent case brought by a former client against a firm that involved this type of conflict, how it developed and the complications that exist in this area of conflicts. The last article discussed methods of implementing an effective way of identifying subject matter conflicts with prospective clients, before engaging with that prospective client.

As inside counsel, there are two roads ahead of you when you receive a new invention disclosure from your technical team: Send it to current outside counsel who handles this general subject matter for your company, or retain new outside counsel to handle the patent search and prosecution. There are different ways to approach each situation as inside counsel.

It is important to remember that in the instance of subject matter conflicts of interest, you should disclose as much and as little as possible to allow the conflict search to be effective. If counsel is given too much information and a subject matter conflict of interest is discovered, that counsel may have information that will influence their work on other cases. In some instances, outside counsel may unknowingly use information provided by you in the prosecution of another client’s case. In others, the outside counsel relationship may become compromised, such that their work with your company is no longer feasible.

In the first potential road, you are sending the new invention disclosure to current outside counsel who handles this general subject matter for your company. At this point, it is an excellent time to review the list of competitors that you have on file with the outside firm, confirm that this list is in their conflict system as “adverse parties,” and ensure that there are no conflicts with that list. One way to do this is to make the list of current competitors a part of your invention disclosure form, which would allow your company to list the potential competitors for that technology, as opposed to another invention disclosure from another division of your company — if you have more than one type of technology base. This practice is also good to consider, because competitors come in and out of the market all the time. Treat each invention disclosure as a brand new matter that requires as much scrutiny as any other matter, such as a new litigation matter. This allows you and your outside counsel to have a clear understanding of potential issues.

Since this outside counsel handles other related work from your company, once you get past clearing the list of competitors, it may be very easy to disclose more of the invention disclosure to counsel, so that they can get a sense of how this disclosure is related to others that they handle for your company and whether there are any issues. If this disclosure is something new for your company or for your outside counsel, it is recommended to send a general overview of the disclosure or strategic key words, so that they can run a subject matter conflict search before sending the full disclosure.

If you are hiring new counsel, it is even more important to limit the amount of information provided to the firm, while still sending enough to allow them to effectively search for subject matter conflicts. Once you get past the step of asking them to search a general class of businesses and then your competitors list, you should then proceed to subject matter inquiries. This process may be more like a give-and-take with you asking potential outside counsel if they handle any patent work related to “food processing” or “shelf stable foods.” If they indicate that they don’t, then you should consider sending more information, such as a description of the class of food items or the general processing steps. It may be appealing to find an outside counsel who has experience handling other companies in the same field as yours, but it is likely that subject matter conflicts will arise and get to the point where the working relationship is no longer effective or beneficial for at least one client.

The next article in this series will focus on what kind of training programs should be in place on the side of the company and what to ask outside counsel to provide as training materials for your technical team.

Contributing Author

Sandra P. Thompson

Sandra P. Thompson, J.D., Ph.D., is a Shareholder in the Orange County office of Buchalter Nemer. Her practice focuses on intellectual property, specifically, patents and...